If one of your New Year’s resolutions is to save money, you may want to consider selling your car.
Gas prices rose by five cents to 116.9 cents a litre at most GTA gas stations on Monday, En-Pro chief petroleum analyst Roger McKnight said, adding that the price is expected to remain the same on Tuesday.
That comes after an extremely short-lived penny drop at most stations Sunday.
The hike can be at least partly attributed to the Ontario government’s new cap-and-trade carbon tax, which went into effect on Jan. 1.
McKnight said the Ontario government had estimated an increase of 4.3 cents per litre but added that doesn’t factor in the HST, which will be applied at the wholesale level by the oil companies, bringing the increase closer to 4.8 cents a litre.
“That 4.3 [cents] is not actually true, it’s actually going to be closer to five [cents] because the Ontario government taxes the tax. They can call it a cap-and-trade all they want, but it’s another word for a tax,” McKnight told 680 NEWS.
So, a person who drives a mid-size sedan around 20,000 kilometres a year can expected to pay at least $70 extra per year.
One factor that may affect gas prices is whether President-Elect Donald Trump goes through with his promise to ban OPEC oil from the U.S. market.
“He is huffing and puffing a lot and it depends on how much that is a bluff or not. If he goes up against the OPEC cuts and lets loose with the shale oil, OPEC is going to have to back off a bit. Either prices are going to go up, or they’re going to go down, or they’re going to stay the same,” McKnight said.
He said that when shale oil production starts, the crude oil price may peak at US$58 a barrel and then lower to $50.
Meanwhile, gas prices won’t be the only thing taking a bite out of Ontarians’ wallets.
While the government has removed the eight-per-cent provincial portion of the HST from electricity bills, the cap-and-trade program will add about $6 a month to natural gas bills in the new year. The average home heating bill could also cost extra $5 per month.
When you add it all up, that works out to around $300 for the average consumer: $140 in gas for a two-car household, $84 for Enbridge Gas consumers, and around $74 in indirect costs on goods and services.
Ontario hopes to raise $1.9 billion a year from cap-and-trade and $8 billion by the end of 2020. The province promises to spend the money on programs that reduce emissions and help businesses and consumers adapt to a low-carbon economy.